Possibility of rents coming down that would put me near break even on both properties.I do need a place to live but I would only buy something that has the potential to hold long term as an investment. 

@Aidan Wong You definitely have the potential to benefit from a cost segregation study. 

I believe it's a huge potential, as I've seen personalized lead generation strategies and set up few using generative AI (basically, personalized cold outreach). 

The potential is there for you to increase value and cash out of the hard money loan with long term financing which could put you back to minimal or no cash into the property. 

Before you go any further I’d do a little looking around at some other properties that you might be interested in buying with your boot from a potential 1031 exchange and see if they’ll get you anywhere near your current rate of return.

Hello all,I am a newbie to this site, and wanted some guidance as I navigate potentially buying a 1-1.25 million rental SFH property.

To help you decide, here's an overview of both options:House Hacking Advantages: Immediate profession, easier financing, potential for rental revenue.Cons: limited to multifamily properties.BRRR (buy, rehab, rent, and refinance):Pros: Equity building, a variety of property options, passive incomeCons: Higher upfront expenses and longer duration.If your primary objective is to lower personal living expenditures, house hacking may be a better alternative.

I think the loans automatically drop the PMI when it hits 78% OR if you think the property value has increased (perhaps because you did work to it) then you can get an appraisal and potentially get the PMI dropped sooner.

At the same time, we can talk through the potential renovation costs of the two scenarios to determine which makes the most sense given your current situation and the condition of the building.My personal opinion is always, more cap ex (behind wall MEP) renovation is better to tackle all at once.

And potentially look into hiring a real estate attorney who can at first send a letter to the contractor threatening to file suit.